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The developer is a large construction company in Alanya, included in the TOP-5. More than 15 projects of hotel-type residential buildings with all infrastructure have been implemented, and this is only during the last 4 years. All the residential complexes are sold, the infrastructure operates all year round. Now there are 6 more complexes in the process of implementation.
Examples of implemented projects of the developer:
Project 1
Construction of a residential building with infrastructure in the Avsallar region – EUR 750,000
Location: Alanya, Avsallar (Turkey)
Building land area: 725 sq.m. (there are 4 plots of 725 sq.m. to choose from)
Construction area (whole building) = 1.400 sq.m.
Distance to the sea = 650 meters.
Total estimated construction cost (including project and land) = EUR 750.000.
For this price, the investor can buy the entire project for 20 apartments.
The price already includes the interest of the developer (for the performance of construction work).
Infrastructure: SPA area, gym, sauna, parking, BBQ area, recreation area, playground, cafe.
There is all the necessary infrastructure (restaurants, shops, bars) nearby.
It is possible to build 20 apartments of mixed layouts (1 + 1, 2 + 1).
According to preliminary estimates, the building will have apartments of layouts:
- 1 + 1 of 48 sq.m. gross – 16 apartments (4 apartments each on 1-2-3-4 floors)
- 2 + 1 of 96 sq.m. gross – 4 apartments (all the duplexes on floors 5-6)
The site is surrounded by forest on all sides and is located on a hill, so the upper apartments will have a sea view.
Guaranteed rental option
One of the options is that the investor can leave all apartments for rent.
You can rent it yourself or use the guaranteed rental option from the developer.
In this case, all the apartments must be furnished according to the developers standard.
A package of furniture, household appliances and everything necessary for rent (dishes, towels, textiles, etc.) for 20 apartments costs EUR 160,000.
In this case, the developer provides a guaranteed rent for the first year in the amount of EUR 40.000, for the second year in the amount of EUR 50.000. Year three and beyond – negotiable based on the results of the first two years.
In practice, the peak rent of an apartment / house is reached in the third year after commissioning.
If you engage in renting on your own (hire a manager), then you can reach a yield of 10% per annum, but in our case the developer gives a minimum guarantee, below which the investors profitability will not fall.
Financial model
The average cost of the apartments will be EUR 37.500 (EUR 750,000 / 20 apartments).
Accordingly, based on a 1 + 1 layout, the price will be about EUR 35.000, 2 + 1 – EUR 47.500.
The selling price of 1 + 1 in this area starts from 38-40 thousand at the stage of building and from 50-52 thousand for finished housing.
The term of the project (construction) is 10-12 months.
Average weighted yield scenario:
Prices at the construction stage start at EUR 800 per sq.m. of gross floor space.
Taking into account commissions and discounts, we will deduct 15% and get EUR 680 / sq.m. gross.
The prices at the construction completion stage will be around EUR 1,000 / sq.m. gross.
Taking into account commissions and discounts, we will deduct 15% and get EUR 850 / sq.m. gross.
Lets take the weighted average cost of a sq.m., (680 + 850) / 2 = EUR 765 / sq.m.
Apartments occupy a total of 16 * 48 sq.m. + 4 * 96 sq.m. = 1,152 sq.m.
Thus, the profitability of the project will be 765 * 1,152/750 000 = 17.5% for 1 year.
The investors payment by installments for 7-8 months is possible.
Down payment 50% / EUR 375,000 (project costs, land, part of building materials).
Taking into account active sales from the start of construction, you can invest less of your money in installments, so the real profit in % per annum will be higher than indicated.
General information on location
Avsallar is one of the greenest areas of Alanya, there are many pine forests around and a delicate aroma of pine needles is felt in the air. And phytoncides, which actively release pine trees, ionize the air and kill harmful bacteria.
One of the advantages of buying a property in Avsallar is the stunning sandy beaches. Tthere is one of the popular beaches of Alanya – Incekum nearby, where the sunset is gentle, the depth is shallow, so this place is ideal for families with children. There are several picnic spots right in the pine forest.
The first coastline in Avsallar is occupied by five-star hotels. New residential complexes are built a little further from the sea, but they charm with a large and well-groomed territory and modern infrastructure.
Plot on the map (650 m to the sea): https://goo.gl/maps/bj9sxzskUDgaGjKa6
Project 2
Construction of a residential building with infrastructure in the center of Alanya – EUR 1.6 million
Location: Alanya, center
Building land area: 2,746 sq.m.
Construction area (whole building) = 5,500 sq.m.
Distance to the sea = 450 meters.
The cost of the land is estimated at EUR 1.8 million, but there is no need to buy it. The owners agree to receive apartments for the land.
Cost of construction with documents = EUR 290 per sq.m.
The total cost of construction is 5,500 * 290 = EUR 1.6 million
Distribution of apartments between investors and landowners – 50/50.
Two buildings will be built – one for the investor and the other for the landowners. In fact, the investors building will be larger (3,000 sq.m. versus 2,500 sq.m. for landowners). This difference is achieved due to the fact that the investor will have garden duplexes (two-level apartments with a private garden) on the 0 and 1 floors. The investors block is planned to be located on the site as far from the road as possible, and the landowners block – next to the road.
Infrastructure: outdoor pool, spa, gym, steam room, parking, BBQ area, cafeteria, resting place.
There is all the necessary infrastructure (restaurants, shops, bars) nearby.
It is possible to build 32 apartments of mixed layouts (1 + 1 - 2 + 1 - 3 + 1).
According to preliminary estimates, the house will have apartments of layouts:
- 1 + 1 60 sq.m. gross – 16 apartments (8 apartments on 2-3 floors)
- 2 + 1 garden duplex, 120 sq.m. gross – 8 duplex apartments with a garden on floors 0-1
- 2 + 1 duplex, 110 sq.m. each – 7 duplex apartments on 4-5 floors
- 3 + 1 duplex, 190 sq.m. – 1 duplex apartment on 4-5 floors
The site is located on a hill, so the upper apartments will have a sea view.
Financial model
Thus, the average cost of an apartment will be EUR 50,000 (EUR 1.6 million / 32 apartments).
Accordingly, based on a 1 + 1 layout, the cost will be EUR 35-40 thousand.
The sales value in this area starts from 50-60 thousand at the stage of construction and from 60-70 thousand for finished housing.
Based on a 2 + 1 layout, the price will be EUR 60-65 thousand.
The selling price of duplexes in this area starts from EUR 90-100 thousand for the housing at the construction stage and from EUR 120-130 thousand for finished housing.
The project implementation period (documents + construction) is 16-18 months.
1st stage = 4 months: concluding an agreement with landowners, preparation and approval of a construction project, obtaining a building permit.
2nd stage = 12-14 months: construction.
Profitability scenarios:
- Pessimistic (minimal)
Prices at the construction stage start at EUR 900 per sq.m. of gross floor space.
Taking into account commissions and discounts, we will deduct 15% and we will get EUR 765 / sq.m. gross. At this price, the profitability of the project will be 3,000 * 765 – EUR 1.6 million = EUR 695,000 or 43.4% (but this is the price of the foundation).
- Optimistic (maximum)
Prices at the completion stage will be around EUR 1,100 per sq.m. gross.
Taking into account commissions and discounts, we will deduct 15% and we will receive EUR 935 / sq.m. gross.
At this price, the project will yield EUR 1.1 million or 75.3%.
Thus, the profitability of the project will be 43.4-75.3% in 1.5 years.
We suggest focusing on the pessimistic scenario (43.4%).
The investors payment by installments for 1 year is possible.
Down payment 30% (project costs and part of building materials).
Taking into account active sales from the start of construction, you can invest less of your money in installments, so the real profit in % per annum will be higher than indicated.
Location information:
In the center of Alanya, apartments are quickly dispersed because of everyones favorite views, beaches, shops, and the seething life around. This is a fast capital turnover with a return on funds in 1-1.5 years. Turkish developers build efficiently and quickly, even at the design stage, you can start selling and by the end of construction, usually 20-30% of apartments remain on sale.
The center of Alanya is popular for purchase among Europeans and immigrants from the CIS countries for personal use and rent. Famous brand shops, supermarkets, food markets are located here.
Cleopatra Beach is a paradise on the Turkish coast, its length is about 2 km.
Plot on the map (450 m to the sea): https://goo.gl/maps/DnNNudkM3k3gvbbT9
We are ready to answer all your additional questions by phone +380978330795
Yuriy Hrushetskyi
Overseas real estate agency Deniz Estate
